Fraud Cases Rise As 24 Banks Lost N5.79bn In Three Months

The incidents of fraud in the banking sector assumed an upward trend in the second quarter of this year as 24 Deposit Money Banks recorded 11,679 fraud cases valued at N9.75bn.

Out of the N9.75bn, the total losses to the incident amounted to N5.79bn during the period, representing about 1,125 per cent increase when compared with the N472m lost in the first quarter of 2023.

This is just as the statistics showed that number of insider involvement had risen astronomically.

The figures were revealed in a new Report released by the Financial Institutions Training Centre, on Fraud and Forgeries in Nigerian Banks for the second quarter of 2023.

FITC further noted that the losses were recorded by 24 banks that filed their returns on fraud cases for the period.

FITC is owned by the Banker’s Committee, which comprises the Central Bank of Nigeria, Nigeria Deposit Insurance Corporation, all licensed banks, and discount houses in Nigeria.

It was established to provide innovative knowledge solutions and capacity building programmes that develop and strengthen resources for the Nigerian financial services sector.

The Report added that outsider involvement in the fraud cases dropped by 6.4 per cent, while staff involvement rose by 22.2 per cent within the period.

It said that the total amount involved in the fraud cases during the period rose to N9.75bn, indicating an increase a whopping 276.98 per cent from N2.58bn in the preceding quarter of 2023.

According to the FITC Report, fraudulent loans accounted for the highest loss at 94.35 percent with a value of N5.46bn, followed by mobile fraud, which accounted for 3.39 per cent of the total loss amounting to N196m.

Computer/Web (internet) fraud was minimal, accounting for only one percent of the total losses at N59.5 million during the period.

The report stated, “During the second quarter of 2023, there were 11,679 reported cases, showing a 6.96 per cent decrease compared to the 12,553 cases in the first quarter.

“However, the data indicates a significant increase in the total amount involved in fraud cases. The amount rose from N2.59bn in the previous quarter to N9.75bn in Q2, representing a 276.98 per cent increase.

“Additionally, the amount lost also saw a substantial rise, increasing from N472m in Q1 2023 to N5.79bn in Q2 2023, which corresponds to an 1125.03 per cent increase.

“This increase might be attributed to the fact that banks were liable for the losses incurred and had to make refunds to customers.”

It further stated: “In Q2 2023, there was a 6.40 percent decrease in outsider involvement in fraud cases, with the number dropping from 12,351 cases in the previous quarter to 11,561 cases.

“However, staff involvement in fraud increased by 22.22 per cent, rising from 72 cases in Q1 2023 to 88 cases in Q2 2023. Conversely, the number of terminated appointments related to fraudulent activities decreased by 26.67 per cent, going from 15 cases in Q1 2023 to 11 cases in Q2 2023.”